'RealMoney' Radio Recap: House of Corrections
Looking at the big picture ... the market is having a pretty disappointing reaction, Aaron Task, co-executive editor of
TheStreet.com
, told
"RealMoney" radio show listeners Thursday.
Task, who is filling in for Jim Cramer this week, said that "everything is up, but down from their highs."
Turning his attention to specific earnings results, Task said it was little surprise that stocks such as
Network Appliance
(NTAP) - Get Report
rose after beating Wall Street estimates.
However, he pointed out that
Applied Materials
(AMAT) - Get Report
reported in-line revenue, beat on the bottom line and had strong gross margins and bookings above expectations -- and the stock still fell.
Giving listeners a caveat that you can never make too much out of a handful of trading days, Task said it could be another little sign that the market is turning a little defensive in the midst of a rolling correction.
Consumer staples is one place to put your money if you think the market's going to "take a little more of a defensive stance," said Task, adding that
Hershey
(HSY) - Get Report
and
Altria
(MO) - Get Report
are two potential choices.
He also said that emerging markets could get risky if the market truly is in the middle of a broad correction, identifying it as a sector that has outperformed over the last two years.
Investors can't expect the same stocks or group of stocks that have outperformed for a couple of years to continue to perform at that level, Task said, adding that the market might start doing a little profit-taking.
"This doesn't mean run for the hills," Task said. "You might want to limit your exposure ... or take some profits off the table before the Street does it for you."
Googlemania
Cody Willard, president of CL Willard Capital and tech and telecom contributor to
RealMoney.com
, joined Task to talk about
(GOOG) - Get Report
and
Apple
(AAPL) - Get Report
.
Willard said that these are two of his top-five positions, adding that he's been buying on the recent pullback.
"We can't expect stocks like this to move straight up. ... After they make big moves, I take a little off the table," he said. While he didn't expect it to pullback this far, Willard added that "it is the nature of the game."
He told Task that he still believes that this is just a correction because Google is "the fastest-growing company in the history of the planet. ... It has blown the doors off almost every other company
in terms of profits and sales, and that's not about to stop."
The quarter was a disappointment, but Willard believes that the company still has a growth story behind it. He said it will become the de facto broadcaster for everything -- video, radio, the written word -- creating a one-stop Google world.
As far as Apple goes, Willard said he wasn't concerned about the announcement that
Amazon.com
(AMZN) - Get Report
is set to compete with the iTunes music software.
Am I Diversified?
Task told a caller who has had a good run in energy over the last few years that he is bullish long-term on energy because we're using more than we can produce and at an accelerated rate.
He said it might be too late to take profits, because we just had a sharp correction. At these levels, Task said he'd hold onto favorite names, and that if another run-up happens, it never hurts to take some off the table.
The caller also wanted to know about Chinese Internet portal
Shanda Interactive
(SNDA)
. Willard said it was the least-appealing of the China Internet plays, a sector he would stay away from.
Willard also said that he would stay away from
Rediff
(REDF)
, calling its valuation "ridiculous."
"It's a Web site in India; it's not India's Google," he said. Willard added that it's not going to be the epicenter of an Internet revolution in that country and that he believes that the shares will sink.
As for
Avaya
(AV)
, Willard said that it will likely be a leader in the VoIP space and that the company is well-positioned to take advantage of the fact that companies are turning their traditional phone systems into Internet phone systems.
However, Willard said that he kicked himself when he missed its run a few years ago but that now he would be inclined to look at faster growth, as in newer companies such as
F5
(FFIV) - Get Report
.
BE Aerospace
(BEAV)
has performed well and just posted strong earnings, Task said.
While he doesn't see any problems per se for the company and believes that the sector is doing well, Task would be inclined to book some profits but keep some position in the stock.
If he were a momentum trader, which he said he is not, Task would even buy more on a pullback.
Task told another caller that
Plug Power
(PLUG) - Get Report
has suffered a bit lately and that it has negative operating margins, is losing money and that its quarterly revenue growth turned negative.
Task would stay away, particularly if the market is getting defensive.
He suggested looking at
Avista
(AVA) - Get Report
.
Task told a listener that his portfolio was diversified. It included
First Marblehead
(FMD)
,
UnitedHealth Group
(UNH) - Get Report
,
Nabors
(NBR) - Get Report
, Google and Altria.
And he said that the difference between preferred and common stock is that preferred stock gets paid a dividend that must be paid out before a dividend gets paid to common-stock holders.
However, preferred-stock holders are not by definition given voting rights.
Want more Cramer? Check out Jim's rules and commandments for investing from his latest book by
.
